'We learnt from Sulu incident,' says Azalina

KUALA LUMPUR: Malaysia has learnt from the Sulu issue and addressed third-party litigation funding in the newly passed Arbitration Bill 2024 (Act 646), said Minister in the Prime Minister’s Department (Law and Institutional Reform) Datuk Seri Azalina Othman Said.

Among the new provisions in Act 646 is that a third-party funding agreement by the funded party must be disclosed to the other party to the arbitration, the arbitral tribunal, and the court, said Azalina.

“We are supportive of any third-party funding in international arbitration proceedings. But, we want full disclosure.

“In legal terms, this will be a gentleman's strategy,” said Azalina when winding up debates at the Dewan Rakyat on Tuesday (July 16).

Azalina said no full disclosure was given in the previous Sulu claimants’ legal action against Malaysia, which was funded by British global litigation fund Therium Capital Management Ltd (Therium).

“We are faced with a situation where we cannot force them (third party funders) to admit whether money was involved. We got this information from an investigation we carried out,” she said.

Azalina also said lawyers representing Malaysia have sent numerous demands for full disclosure to Therium, but no response was given.

Azalina cast aspersions over the sincerity of Therium in funding the Sulu claimants’ case against Malaysia.

“I am not convinced that people from Therium are of Sulu heritage. I’m not convinced about that fact,” she said.

Pending outcomes of the ongoing appeals in Spain, France, Luxembourg, and the Netherlands, Azalina said Malaysia will bring its case to international courts to pursue compensation from Therium over the legal saga.

“We want compensation from these funders because no full disclosure was given. We want to know their objective,” added Azalina.

Meanwhile, Azalina said amendments to the Arbitration Act would not undo the damage done on the Sulu issue, but it will strengthen Malaysia’s international image, especially in Asean.

“As we are chairing Asean next year, we can show these countries that when Malaysia talks about international arbitration, we are a country with high principles,” added Azalina.

The Arbitration Bill 2024, brought by Azalina to the Dewan Rakyat, was passed at the third reading with a simple voice vote.

In 2019, the Sulu claimants took the matter to Spanish Arbitrator Dr Gonzalo Stampa to seek compensation for land in Sabah allegedly leased by their ancestors to a British trading company in 1878.

On Feb 28, 2022, Stampa decided in their favour and the final award of US$14.9bil resulting from the sham arbitration was issued illegally by Stampa to the eight claimants despite the prior annulment of his appointment as an arbitrator by the Spanish court.

The group then brought the case to the Paris Court. However, in March last year, the Paris Court of Appeal upheld the suspension order obtained by Malaysia against the enforcement of the final award.

Presently, the claimants have filed an appeal with the Netherlands Supreme Court which will be heard on Oct 25 against an earlier court decision not to recognise and enforce the Final Award in the Netherlands in favour of the claimants.